Mark,
For some unknown reason I couldn't post this message on 'The Saints' thread. So here is the e-mail that I finally received from the SEC concerning insider trading. It is as follows;
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From: FloydA@sec.gov
Date: Tue, 7 Jul 1998 10:16:58 -0400
Subject: insider trading
Dear Mr. Schwertley:
Thank you for your April 22, 1998 e-mail to the Commission with
your questions about insider trading.
In general, a person posting that he has heard that a company will
be releasing a news report would need some special relationship with
the company to be liable for disseminating the information. A
fiduciary relationship or even a lesser relationship that carries an
obligation of confidentiality is usually the type of relationship
establishing liability. A tipper (the giver of information) does not have to be a corporate insider, nor have a shareholder relationship. Under the misappropriation theory, whereby the tipper is a corporate
outsider with a duty to the source of the information rather than to a
person with whom she is trading, intent to misappropriate the information is required. The courts look at whether or not the intent was to benefit financially from giving the information, among other things. Even if not liable for insider trading, a tipper can be liable for fraud.
As to whether the information is true or false, released or unreleased, generally, someone would have to be damaged for a case
to be brought against the person who released the information.
If you know you have insider information, a tippee, and trade
based on that information, your liability is derived from that of the
tipper, the person who gave you the information. Defrauded tippees can bring suit even with knowledge that they possessed insider information, if the court deems it in the public interest to expose the illegal activity of the tipper. Thus, the tippee is not absolutely barred from bringing suit because of his own wrongdoing.
For more information on insider trading law, see recent case
United States v. O'Hagan, 117 S. Ct. 2199. If you need further
assistance, please contact our office at 202-942-7040 or by e-mail.
Sincerely,
Angela Floyd
Law Clerk
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I think I win our bet!!!!! :-)
WFS |
